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Your Business

News/Business. A focus on issues facing small business in the United States.

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Erica 3, Us 3, Massachusetts 2, An American Express 2, Terri 2, Mike 2, Stella 2, Facebook 1, Washington 1, Putdown 1, Utah 1, The Lantern Inn 1, Ledyard 1, New York City 1, Jeff 1, Pennsylvania 1, Salem 1, Brian Paye 1, Deval Patrick 1, Barney Frank 1,
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  MSNBC    Your Business    News/Business. A focus on issues  
   facing small business in the United States.  

    January 5, 2013
    2:30 - 3:00am PST  

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"pumpkin plant" and i'm here to help you. >> reporter: she ran the bed and breakfast for eight years until she bought it eight years ago. >> it is beautiful around here with a cam fire at night. >> it is absolutely beautiful and secluded. >> when we received the letter, she said she is so inundated with outdated resources she is having a tough time running her business. >> what is the tough snes. >> well, i'm running in a wheel and i feel stuck. >> she may seem stuck, but that is not what we see it. what she needs is a makeover. >> you are doing marketing, and interior decorating and repairs and accounting. >> you are are a chef? >> yes, and reservations all of
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the time and fielding all of the phone calls. >> as she went through the long list of jobs, the problem with the way she ran the business became incredibly clear. >> your inn is the classic model that in many businesses that struggle in growing to the next level are stuck like this. you are the yoowner in the midd. what i want to do is to transfer this into a traditional organizational chart. until we start to push you up the org chart, you won't be managing the business, but running in the minutia. >> an owner needs to understand the big picture and that is where mike's picture revealed important gaffes. >> what is the break even point? how many people do you need? >> i haven't done a specific account, but my guesstimate is that i need to sell out weekend s year-round to cover my expenses. >> many entrepreneurs let the accounting slide even though they know better.
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the same often goes for keeping up with current technology. >> you take reservations by phone and not on web. >> we don't have tonline bookin. >> looking at the web, some of the pictures were outdated and looked old and some of the pictures were in need of a makeover. that is when we called in the "your business" s.w.a.t. team. up first is andrew who is an expert decorator from bucks county, pennsylvania, specializing in inns and hotels. we asked him to look at erica's website and pick the one room most in need. >> i want you to meet andrew. >> the room decided to makeover is here in the cottage called chateau eve and to be honest, it is not looking like chateau material, and erica must have agreed, because before we arrived she made her own repairs
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to the plastic. >> a lot of the colors are heavy and not outdated, but heavy. it is personal, you know, and we can take personality that it is not your home anymore, but the business. >> what is your feeling about what andrew is saying? >> yes, i didn't like about the dark coloshgs because i get rave reviews about the color. >> well, it is not a putdown, but a personal thing for you and like the artist, you have to step away from where you live and look and go out and come back and look at it with a fresh eye. >> yes, and i don't want to look like every single b&b out there. >> and you want to make money. he has a lot of work to do. over to the brass tacks and honestly the first impression? >> oh, my god. the website is bad and the picture is bad and this is proof of the pudding. >> what are your thoughts of erica and how she is listening to you. >> erica is stubborn.
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>> i'm skeptical what he is willing to produce, but i am willing to give him a shot. >> scale of 1 to 10, what is the room right now? >> zero. >> the jury is definitely out on what he is saying. >> we gave andrew a modest budget and 24 hours to show his stuff. when he is done, we will see if erica can be convinced. meantime, mike wasted no time to introduce erica to the next member of the team. dawn is an account specializing in quickbooks software. >> give her a sense of how she is doing the accounting now. >> not really. >> how do krou track stuff? >> i don't. i have money coming n and pay the bills and i see what is in my business check account, and that's about it. >> all right. now you are trying to blow my mind. how do you track the taxes? >> well, i pay the sales tax, but per my 2011 taxes, i just guessed. >> you guessed.
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>> i guesstimated. i sent in like guesstimated and sent in an amount. >> i hope you guessed high, because that could be trouble if you guessed low. >> i think that i guessed high. >> that is a technical foul we call it. >> should we look at the books? >> yes. >> show us where they are. >> literally, we want to see it. >> all right. >> and this is the office. >> yes. this is where hel happens. >> i am glad to see that you have accounting records. >> those are not mine, but the previous business owner. these are mine right here. >> all right. it looks like you followed their system. >> they headed back upstairs where dawn got erica started on a quickbooks account. >> go ahead and hit finish. now we have created the bank account. >> to be brutally honest, what is your first impression? >> hot mess. first interpretation of what i have seen here, not, again, not abnormal, but frightening. >> can businesses really operate
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like this? >> well, they can, but not for very long and they won't be in business very long like this. >> but you are confident that we can fix it? >> it can always be fixed. >> while dawn and erica finished up with quickbooks and andrew was busy working on the chateau, we asked andrew's son, photographer christian gianelli to get started on the website. >> this is christian who is one of the pre-eminent photographers for specifically bed and breakfast inns in the nation and he has donated his time to help us out here. >> what have you got go g ing o? >> well, i'm setting in the lights here, and interior photography and a lot of it has to do with creating your own light. >> erica was so eager to look at the new photography she convinced christian to give her a preview. >> that is so nice. it is the patio. and wow, it is looking incredible. >> so far, erica loves his
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photos and she has a new accounting system that she didn't know she needed, and room makeover, she is not quite sure that she even thinks that she wants. but she is so busy working in the business doing all of the daily chores that she has not figured out how to get on top of it to guide the business. so when we come back, more surprise surprises and a plan. if you are looking to land a big breakthrough or meeting with the invest investors a well crafted pitch is one of the most important things that a small business owner should have, and yet so many people get it completely wrong. our guest is here to share some tips on how to build an elevator pitch that will increase your chances for success. terri is the principle founder and owner of a business plan and
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she is author of "small message, big impact." so as you get this idea so big, how do you e define it down to intention. >> you say, what do i want to have happen as a result of the message? we are all selling something, a product, a service, philosophy or idea. when you sell yourself, everybody sells something, so what do you want to have happen as a result of the message? what is the outcome, the next p appointment time or the referral or the person who can increase the opportunity and what do you want to happen? and then you design your message around that intention. >> and you have a different message talking to a potential investor or potential partner or potential customer. >> exactly. using small messages with big impact will keep you nimble, because one response fobl one listener could be different from the response to another listener, so build that flexibility. >> okay. so what do you tell them to make
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that happen. >> you start with the need, why do they need you, why do they need your company and why do they need it now. you have to answer the so what question. some say, because we have good customer service. well, so what. what about that customer service to separate you from the competition and serve a specific need. how can you save them time? how can you save them mental sanity or give them greater security or make it fun? those are need-focused issues for building the case. >> get scrappy? what do you mean by that? >> well, ultimately, it is difficult to capture someone cease attention in the marketplace, so we have to get creative to capture their attention. so with what unique way can you open a conversation so people say, oh, that was clever and then from the clever opening you can move into the core message org the case. >> and then suddenly, you are memorable as well. and this is incredibly important.
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speak in your own voice. if somebody writes something for you, it is not going to sound authentic. >> you go to the comedy show and see a great comedian and you go home to retell the joke, but it does not land in the same way, because it is their joke. you have to give yourself permission to engage in a warm and conversational style and give yourself permission to be yourself and have a conversation just like we are. >> and closes, what can you do ther there? >> well, there is a classic line from the glenn gary glenn ross, always be closing. we do have to ask somebody to do something as a result of the message. what do you want them to do? set up the next appointment time? close the deal? set up an introduction? what do you want to have happen. when you ask somebody to do something as a e result of the message, the higher the probability that you will get the outcome that you are looking for. thank you, terri, for all of to
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a advice, and we do a number of elevator pitches on the show. >> i love it. it is my favorite episode. >> and so we appreciate your help. >> thanks for having me. and coming up, tips on why you should nef say no, and the panel weighs in on where you should start to end your business. we travel back to connecticut as we make sure that the potential cu customers have no reservations about staying at erica's bed and breakfast. we've all had those moments. when you lost the thing you can't believe you lost. when what you just bought, just broke. or when you have a little trouble a long way from home... as an american express cardmember you can expect some help. but what you might not expect, is you can get all this with a prepaid card.
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spends like cash. feels like membership. a few years ago i was here at pilates on fifth here in new york city and a woman walked in and asked the receptionist, do you have yoga here? and the woman responded we have pilates and cardiopilates and that is interest, because they don't have yoga here and she did not say that and the woman ended up signing up for a cardiolates class, and i asked the owner about this and she said it is comple completely by design. never say no, because if you can get around saying no, you can recruit a potential client. so it is your business and tip number 109, never say no to a potential customer. as we saw earlier erica hall
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may be getting more help than she expected and a new decor she may regret. watch now as "your business" team of experts gives her the tools she needs to complete her business. >> reporter: it is morning in ledyard, connecticut, at the lantern inn, and she is giving the secrets of the famous french toast. >> so the world famous french toast takes two minutes? >> yes, it is all in the ingredients and using the top ingredients and also in the baguettes. i make my own vanilla beans. i chop them up and put them in vodka. >> that is good. >> and erica is in luck today, because we called trip adviser.com's brian paye. and when he looked at the site
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he had lots of suggestions. one of erica's big concerns is filling the weekday vacancies. >> trying to figure out how to bring them in the middle of the week is something that most properties like this sort of struggle with. >> he recommended that erica put an ad on his site and giving people a discount if they stay more than two nights instead of just the weekend. >> the kinds of offers that extend the weekend and give them a reason to stay longer and fill the rooms. >> he gave erica a year's worth of extra services designed to increase the traffic. >> yes, definitely great suggestions and not too difficult to implement. >> and i have a sneaky suspicion that you have one last surprise? >> we do. i thought about one of the best expenses that i had at a b&b and it is the warm bread in the morning so we have a surprise for you out in the car. >> wow, it looks awesome.
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the breadmaker. >> load it up in the night and you will have fresh bread in the morning. and the guests have the smell. >> and then next was a phone call from salem, utah, who is one of the top sites for online bookings. >> i want to introduce you to jeff bryce who has reservations specifically for inns like this. meter et erica. >> hi, jeff. >> we will match up the site to your experience there, and allow the guests to book right online. >> sounds great. >> what are your thoughts and fears and changing over? >> i'm a little nervous, because i am used to getting that personal contact and sense of person coming in. >> when you look at the time savings, what would you cut it i
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in? >> in half initially and then overtime, a number of hours. >> that sounds like a vacation maybe over 365 days. >> yes. >> and now online bookings is becoming the industry standard and without it, erica is sure she has lost out on a lot of reservations. >> the footsteps i wanted to he hear. >> and now joining us is a woman who offered to redoer ri erica' website with these new tips on it. >> this is modern rustic, and big picture up front and rotates and show ys you the aspects on e home page and you see it, but it has the book now. people want the quick and easy book now and call now impression. >> so the right off of the bat impression? >> i like this one better, because it is more exciting and more hip and modern.
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>> with a new web design chosen and the photos and the online reservation system in place, filling the rooms should take less effort, but what about the cottage makeover? what will she think? >> well, get her in position. okay. you ready? three, two, one. >> whoa! wow. really cool. yeah, definitely. it is very cool. very different. is pit is the same bed? >> yes, the new headboard. >> so cool. that is neat. wow. you guys made that. >> yes. >> that is amazing. and oh, my gosh, you took the mirror and painted it. it is so much better. >> on a scale of 1-10, what is the room now? >> you put me on the spot. i would definitely say compared to where we came from, i would give it a nine for sure. >> okay. >> and the customers will give it a --
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>> you have a good nine to ten. >> i think so, too. >> more income coming from it now. >> definitely. >> there is a lot of positive things that we have created for you besides putting new sheets on the bed. >> well, they were happy with it, and seemed fairly happy before and now they will be totally blown away. >> it is looking like erica may have finally found a way to get beyond the details and at least get on top of her business. >> all right. so it has been a whirlwind of two days. what's your thoughts? >> i mean, i'm just flabbergasted by all how far i have gone forward with the business through your guys in two days. it has been pretty amazing. new website, new photos and new online booking system. >> and so when everybody is running around like a wild person, and yourself, included, i was sitting down drawing this chart right here tracking what your roles are, and i documented every role that you play. all of these 25 positions are played by you. before you spent about zero hours a day actually running the
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entire business and overseeing it, because you you were in the minutia and now four hours a day to run the business. >> yes. >> and it was an absolute pleasure to hang out with you and help you. >> thank you, so much. >> sure. was this makeover successful? well, let's see if there is room at the inn for this week's board of directors. peter sherman is the cofounder of the b&b team and he has been an inn consultant and broker. and stella is a founder of a group that promotes team building, and we have our editor from the "wall street journal." peter, thank you with your help on this makeover and you went offthere to visit erica, and what did you think? >> i was really surprised to see that property look as nice as it did, because from the online presence, i had a very different impression. >> and isn't that amazing, and
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how important is that online presence and that is what gets people there. >> well, it is critical because you have three seconds to get people's attention when they come to the website, and if you have not got them in three seconds, that i will hit the back button. >> yes, and owners are intimidated about the web sites, and they don't know how to tackle it and look at the huge difference that it could make for her, and especially in terms of the online reservations. for retailers what we have seen is that they can you the web to cut out the middleman and sell directly to consumerers. the web can really transform all kinds of businesses now. >> what do you think it is? what is holding people back from doing something that is hard and manually to signing up for a service ha makes it easy? >> well, it is a lack of knowledge of where to go, and you have to really shop those services. there are services that can help whether you are a retailer or a b&b essentially or a winemaker, but i think that it can be a little intimidating to get to the bottom of the pricing of the service
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services. a lot of the them are premium and it can be hard to assess what the final price will be. >> and stella, the thing that mike responded to, and don who was so amazing in the spot, the finances. >> oh, my god, indeed. that was scary. i think that what happens is that it is really important to pay attention to what you do so well. she was glowing when it came to the french toast. i mean, she loves that part. so if you are not good at something, don't just ignore it, and don't do anything, but find someone who can help you. again, that took a few hours of setup. you can go the sites like task rabbit, and elance and hire people to come in what this woman did for her. >> and often people forget about the finances. >> it is important for any innkeeper or any business to know what money is coming in, and what is generating the income and what are they
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spending the money on. if they don't know where they are spending the money, they have no idea if they are profitable at all and certainly, they don't know how to make the business more efficient so that they can be more profitable and whether they have three rooms or 30 rooms or running a retail business, you have to know what your cost of doing business is, or you are going to end up spending more than you should. >> and again, the key to this is that it took two days. >> thank all of you guys for your help, and i am so happy that you worked out for you, and that is a very good story. >> very good story. >> thank you. it is time now to answer some of your business questions. vanessa and stella are with us aga again. the first with one is about getting out of your business. >> so here i am 16 years into it, and i'm ready to sell my business, and i need a place to go in order to find out how to make it happen. >> where do you start? a lot of people get into the situation and good at running the business, but don't know how to sell it. >> congrats for 16 years in and wanting to sell.
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i would go to bizbuy.com. you can research the asking price and post your sale and find a broker to help you make the sale. the first thing before you post is to figure out the sellers, and you want to figure out how much earnings your company makes and go three years back into the records and have all of the numbers ready. once you understand your true earnings then you want to understand what's the multiple that you can sell your business at. so, for example, technology companies can sell at a multiple like sometimes up to 10 times what their business is earning, whereas a manufacturing company might sell at a multiple of four times so you have to understand and not undersell the business. >> how likely is it for anyone out there who is with a business and okay and not gang busters and not some fast technology growing, and fast growing technology company, is it likely they will sell their business? >> we just looked at this at the
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"wall street journal" a couple of weeks ago and i don't want to be a downer, but small business owners are struggling to sell their businesses and feeling stuck. the valuations for businesses are down, and the sales prices are down still, so what we have found is that a lot of the business owners are having to postpone retirement five years or longer. some othf them have to agree to the burnout deals and stick around until it changes hands or stick around until the business makes certain targets before they get payments. this is a problem for baby boomer business owners who start started their businesses when things were going well and an american dream they were after and now here we are coming out of the recession, but the economy is still stagnant. >> and let's move on to the next question, and this is when to ask for funding. >> is it a good idea for us to borrow the money from the bank
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before the savings are depleted or should we continue to just burn through those until there is zero left? >> you never want to hit zero. >> yes. i mean, the -- to answer this question, the first thing that comes to mind is that you have to think about the likelihood of failure and failure two years out, three years out and four years out, and you have to think of who is going to be hurt the most in this. what is hard for people who start businesses who don't get outside investors into the businesses is that it is, you know, their savings and they feel the failure more than if they had a venture capital backer for instance. if you start to borrow money from the friends and family, they may suffer when your business fails. >> you should always be talking to people about getting the money even if you don't need it and you don't want to be down to the wire and think, who is going to give me money. >> business is like dating and you nef want to be desperate. so not only if you have the chance now while you are still
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ahead to get some padding room in there, you are are not only creating a cushion for yourself, but you are also developing a relationship with your lender which is really big, because when it comes time for you to really need some cash, you have a credit history established. >> stella and va net is a, thank you with your help on all of this. appreciate it. to learn more about the show click on the website it is openforum.com/your business. you will find all of the segments today, and plus exclusive web content to help your business grow. also, you can follow us on twitter. it is @ @ msnbcbiz. don't forget to become a fan of the show on facebook, because we love your feedback. and also, we will explore the iconic family who has been maintaining water towers for
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over four generations, and will his son carry the business into the fifth? until then, i'm j.j. ramberg and remember, we make your business our business. we've all had those moments. when you lost the thing you can't believe you lost. when what you just bought, just broke. or when you have a little trouble a long way from home... as an american express cardmember you can expect some help. but what you might not expect, is you can get all this with a prepaid card. spends like cash. feels like membership. are you familiar with the
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association of wild card weekend? this is wild card weekend. it's the opening weekend of the nfl play-offs, which is important to know because even if you are someone who does not care at all about football, you should know that the people in your life who do care about football are going to be very distracted this weekend, because there are four really good games, two on saturday, and two on sunday. it's called wild card weekend for reasons that are mostly too boring to explain here. suffice it to say it's the first weekend of the play-offs that includes teams that did not all win their divisions, but they got into the play-offs anyway as wild cards. on the occasion of this wild card weekend in football land, the man who has decided to make himself washington's political wild card is the brand-newly retired massachusetts congressman barney frank. barney frank kicked off the weekend by going on tv this morning and said he would please like to be picked to be the new senator for massachusetts. he said he would like to be the interim replacement for john kerry, who is expected to be
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confirmed soon as president obama's new secretary of state. >> a month ago, a few weeks ago in fact i said i wasn't interested, which is kind of like you're about to graduate and they said you got to go to summer school. but the deal now means that february, march and april are going to be among the most important months in american financial -- >> so you're going to consider it? >> yeah. i'm not going to be coy. it's not anything i've ever been good at. i told the governor i would now like, frankly, to do that. >> i told the governor that i would like to do that. barney frank then said to massachusetts governor deval patrick on national tv, he said, quote, coach, put me in. this is not usually how these things work, right? most people don't publicly lobby for this kind of job. you're supposed to say something diplomatic like oh, i'd be honored to accept the position if it's offered to me. but really, that's a decision for the governor to make. that's what everybody else does. barney frank, though, wild card, which is why everybody loves him. here is how massachusetts goveor